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FINISHED COPY

NINTH ANNUAL MEETING OF THE
INTERNET GOVERNANCE FORUM 2014
ISTANBUL, TURKEY
"CONNECTING CONTINENTS FOR ENHANCED
MULTI-STAKEHOLDER INTERNET GOVERNANCE"

04 SEPTEMBER 2014
14:30
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD) OPEN FORUM
THE ECONOMICS OF AN OPEN INTERNET

 

 



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This is the output of the real-time captioning taken during the IGF 2014 Istanbul, Turkey, meetings.  Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.
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    >> MODERATOR:   All right. We're going to start. An order coming from above. Sound and mic. Okay. We're going to start. Thank you very much for being here. I hope that you will engage with us in the discussion. This open forum is about the OECD and what it does. Not only what we do with multi-stakeholders. Something that is the reverse of the fragmentation issue. We call it the "Economics of an open internet."
    Before we start, I want to say a few words about what is the OECD. For those, if any do not know what this organization is. The mission of the OECD is to divvy up policies. It is better policies that better the multi-organization. It has a strong record informing policy through measure that are comparable across countries. Especially in this area, it divvies up adoptions from the council that are non-binding. But generally, they represent a consensus, not only of member countries, but society, the business community and the internet technical community and they work well because they've been divvied up throughout the countries. It's structured like a ministry. And we have a committee specialized in digital economy policy. And it is that committee which is in charge of all policies that are related to the growth, the promotion of the digital economy, but also to addressing challenging that come with it.
    Just a couple of recent achievements. We've recently published a review of telecommunication policy and regulation in Colombia and we also revised, in 2012, although the publication is '13, our privacy which dated back to 1980 in this area.
    When it comes to digital economy and an open internet, there is an approach that is guided by 14 principles which have been adopted because members and stakeholders considered that they represent best practice in this area. In other words, if you want, economy grows and social well being, there is a proven record, at least in these countries, because things may be different in other countries, respecting these principles when you divvy up policies -- (cell phone sounds). It's my boss. Is it the end? For these principles which I think are more relevant to the topic of this open forum, which is on openness.
    A couple more words about the OECD. The OECD has been present in the area of internet policy and governance forever. It has been a member and followed all the ICANN meetings and the IGF, and receives input from all communities and other international organizations. The OECD participated in (indiscernible) advisory network which focuses on various issues related to internet policy and governance.
    In June we had a high-level session with people coming from the US, but also from Brazil and all stakeholder sides, discussing the escape and policy governance and how it may impact the OECD.
Particularly important, we will organize -- we start to organize a ministry which will take place in 2016 end of April, beginning of May, Mexico. Opening of the internet will be one of the themes, along with the level of maturity of the digital economy, elements that will focus on the impact of ICGs and the internet across the economy and across the society.
    I would like now to introduce my director, Andrew Wyckoff. I'm sure many of you know him. Andy leads the OECD on innovation, on science and technology, IT technology which he knows, and the statistical work which is associated with each of these area. And he will now explain to you why an open internet is important from the OECD perspective.
    >> ANDREW WYCKOFF: Thank you Ann; and thank you for coming to this session. It's probably obvious to most people in this room. You take for granted, of course the importance of an open internet, but I think you have to remember that those of us in this room and in here at this table represent a really small segment of the over-all population and certainly the political environment that's out there.
And I think one of the important missions for the OECD, but also for the IGF, is to begin to have a broader community, particularly broader economic community from the OECD perspective. Understand how important the internet is to their every day economic activity and social welfare.
    I think this is quickly becoming better and better known, but you would be surprised the number of CEOs and policy makers in areas other than communications and information society who don't quite understand how important it is.
    And we put up this figure here because we see from the OECD, which is a bit distinguished by having every policy area underneath its roof with the exception of military and intelligence which is done by NATO. We have a health committee, an education committee, taxes, transportation, you name it. And as you go to these different committees, we begin to see ICT issues rising up on their agenda. Let me just mention that some of these areas we've done work in recently. Usually it's a partnership between the director that I work with Anne and other partners here. One is on information communication technologies for the environment. We've done work on public sector information and how important it is to get that into the public domain. We've done work -- ongoing at the moment -- on health, wellness and aging, to harness big data to discover and treat dementia, Alzheimer's in particular.
    We're working actively with the education director in communication technology in areas of education, in particularly MUUKs, and last but not least -- everyone's favorite part -- the tax collectors who are worried, understandably, I think, that there are aggressive text management techniques under way, but some multinationals particularly to erode the profits they generate in one area and shift them to other low tax areas.
    Actually, this is done legally. It's just that the rules don't understand companies that are based on intangible assets. They're more rooted in a tangible world of factories.
    It is with this that I would stress the importance of the internet because it affects every part of the economy and society. So that's why we're eager to undertake work in this area. I just want to lay out a bit of a conceptual framework for you. Partly because we want your feedback and comment and input on what's missing. What are areas you think we should strengthen. What are areas we should avoid?
    Anne and I have had this talk for decades. It has a very broad interpretation at the OECD. It does mean business is markets and observed economic activity. And we do like indicators, some of which are showing their age, like GDP, or productivity gains.
    But we interpret economics broadly to also mean social welfare which tends to be a little bit harder to measure now and then. But there are concepts like consumer surplus, or more broadly, innovation, or permissionless innovation, which is something that we are behind because we see that as the driver of economies. This is hard to measure, but not impossible.
    The second area I'd like to talk about is assessing the impact of an open versus a closed internet. Analytically, this is relatively easy in some ways. Those of us who have my hair style can remember an era before the internet existed and what that was like and the cost that we had. No appearing. No convergence or bundling. No over-the top providers and no productivity boost in the latter part of the '90s and the early 2000s.
    We can look at cables being cut or countries cutting out the internet and getting proxies. But analytically, but that's not a good proxy, we don't think. Because the most likely future path of the internet will be a partial or selective fragmentation is our best guess.
In fact, some of the things that cause fragmentation to occur, protecting children online or limiting spam is one sort of friction. It is with this that we prefer -- the latter gives a negative connotation that may be fully justified.
    Let me just conclude by saying that, as we look at the challenges to an open internet, I'm drawing four large categories. The first would be a challenge to the internet architecture itself. And these mean inoperable, or the lack of inoperable, the second is where policy makers want to reach in and achieve a policy goal that may result in some challenge to the open internet. These could be whether sovereignty concerns, human rights concerns, or economic concerns.
    And then there's the unintended effect of implementing those public policy measure, some of those which aren't written in a technical way at all. They're written in a policy way, and they need to be interpreted in a policy way and this can have unintended effects.
Last but not least, the last major category is the lack of openness, which may be due to economic incentive, that want to make profits, return value to their shareholders and a lot of competition isn't useful for doing that. So in some cases, they like to have a niche that is their own. This can lead to a lack of complete openness. Let me end with that and let Anne turn to the next speaker.
    >> MODERATOR: We believe an open internet is good. Otherwise you mentioned, what some people call fragmentation may be beneficial at different levels. I would like to ask Pablo Marquez to take the floor. He is the Director for Communications Regulation of Colombia. I will ask the same question to the other members of the panel: What is most important in keeping the internet open from your perspective, Government and telecom regulator in Colombia.
    >> PABLO MARQUEZ: Thank you. We appreciate a lot the efforts that the OECD that has put in to commit to the regulations in Colombia. The review and telecom regulations specifically that has been very, very valuable for the Colombian Government.
    I wanted first to address that the mandate of the regulator of Colombia is to manage competition and investment. Having always in mind that -- or end -- or goal is to permit consumer welfare.
So in that sense, basically, we have just set a set of regulations that are aimed to preserve the openness of the internet, but also the competitive neutrality that is required in order to have a lot of competition between contents, a lot of competition between the different layers of the internet, but mostly, the most -- or guaranteed consumers get the most from the internet.
    So as you just mentioned -- let me try to use this. So Colombia has had some sort of a relationship that is just starting with the OECD. We started the process last year. We started with the set of recommendations.
    Some of the issues regarding the internet were contained in the information policy review and telecommunications review.
    Getting back to the point of this discussion, most of the dimensions of the open internet are -- today -- this is a graph that is based on these four pillars based on technology, economy, society and governance. And the policy of the Government has been to guarantee as much openness to the internet in order to set this regulatory framework and they provide the incentives in order to have -- or reduce all the risks to the open internet.
    When we discuss the -- at the beginning of the OECD -- the process of Colombia looking for a session. As you have seen and analyzed, one of the largest risks we see as regulators is the different interpretation of neutrality. The Government and the Congress through law mandated that we, as regulators, should designate rules of neutrality. These rules that were passed in 2011 are not different from other countries. So basically, we dival up the transparency of different policies and free access of information and of course the quality of services that should be granted to internet services providers to users.
    But in addition, the Government has had another set of policies. So one of the very latest one that is trying to eliminate linguistic -- all the linguistic barriers that may risk the access to an open internet, so within certain applications that allow people to get access to the internet in their language, mostly these are indigenous people from the north and the south of the country, they speak a language that is completely different from Spanish, that they want to preserve. But that's not a reason not to have access to internet.
    So the Government engaged in this project to grant these indigenous communities access to the internet in their language and access to translate certain content to their language. It allows kids to access Spanish, English, and in their own language to certain content on the internet.
So the Plan to le Vital, the plan has a second part. It is based on the dival up publications that allow the use of internet to certain and different communities in the country. Colombia is a very diverse country, but it is an unequal country where there is a lot of poverty. One of the challenges we have is certainly this, to try to shorten the gap between the poor and the rich. We think with more access to the internet, we will allow a lot of people to get access to the knowledge that some others in the past, they didn't have.
    So that's basically it. So we, in the Government, are try to go do as much as we can to open internet as much as we can for everyone. First, from a regulatory perspective, setting the right regulations to have more competition in the market. But more, from the policy perspective, dival up all the products and providing all the incentives in order to have much more access to people in different areas of the country and making that linguistic barriers and other barriers such as the poverty barrier are not seen and done, constitute a limit to the openness of internet.
    >> MODERATOR: Thank you Pablo, for this. Thank you for bringing up the issue of competition. Access, including populations which are less favored. I would like now to turn to Emily Taylor. Is that okay? No. I'm sorry. Emily Joe? I turn now to Emily. And I think it will follow nicely on what Pablo said. Emily is an internet governance and policy professional. She has notably impressive experience and expertise in issues that are related to the internationalization of domain names. Emily, I would ask the same question to you, if you would pick a few. What is most important in keeping the internet open?
    >> EMILY TAYLOR: Can you hear me? Thank you very much, Anne, and thank you for asking me to be part of this panel. It's such an enormous subject to try to pick one, or even a few factors that are important in keeping the internet open. It's, in a way, it's a little bit like the dialogue on climate change where very few people would say, "I really want the climate to change and for it to have an adverse effect on the planet." But because everybody needs to take little steps to change, it all sort of creates this effect.
    And looking about, one can see that there are numerous factors contributing to perhaps closing down what we have previously enjoyed or at least risking that. And three, that I would like to highlight very briefly -- and the fundamental protocols are -- Andy, you talked about the importance of keeping the architecture interoperable. That was the very first thing that the protocols first brought back in the day.
    As we start to move into the next phase, it's very important that internet addressing and numbering moves on to the success of protocol IP Version 6 so we can enjoy the things that Vince mentioned in his closing remarks on the first day.
    One of the things that I've been looking at is some of the work-arounds that private sector makes. Andy, you talked about private sector conduct. IP Version 6 are adopting internet translation on a very broad scale. On one hand, network translation is good, it necessary. However, the consequences of doing it more and more and more is that you create opaque networks and you, in fact, recreate those classic communications, single point of control which actually obliterates the open network. I'm not going to speak much longer of this because it is a subject of a workshop after this.
Another thing, big data. Andy, you mentioned the benefits and excitement to big data, and what that mentions is statistics. It is the phenomenonal, the confluence of information being available.
    It opens amazing prospects for advancement in economic benefit and social well being, however, needs to go hand in hand with rules of the road. Issues like privacy, individual rights, is not really clear who has responsibility for these. Is it everybody? Is it a handful of organizations that have a lot of the data? Who is it? And who are they accountable to? Who do we go to when we feel our individual rights have been infringed, or if we want to reverse what seems to be an arbitrary decision by this increasingly small number of large companies that hold a vast amount of data on us.
    As you mentioned kindly in your opening remarks. Multilingualism, Pablo, you were talking about their impact on access, particularly as we are thinking about who are the next billion who are going to be online. I've been working to produce a world report on internationalized domain names on deployment. We talk about multi-language content and it's been mentioned in the opening ceremony, how important that is and applications for people in local-language content.
    But how you get around the internet is really important and domain names were originally devised so they would be memorable and meaningful for individuals so that they could help to locate online resources.
    Now, even if you have incredibly sophisticated search, as we're lucky enough to have, I, as a native English speaker, like the other 10% of the world's population who are, have a benefit because I can look at the domain names that come up in the search results, and I have a point of triangulation to see if I think that is going to be a trusting place to go to in my search. But if you don't read the Latin writing systems, if you're Chinese or Korean, then you don't have that benefit.
    Internationalized domain names have been available for ten years. There are 6 million now registered. That's great, but it's only 2% of the world's domain names and it bears absolutely no relationship to the numbers of people offline whose writing systems are not Latin script.
    The main barrier identified by industry experts to mass uptake. Until recently, you weren't able to use them in e-mail. If you want to use a domain name, you can't use them at all as your user identifier if you want to open an account with Facebook or Google. You just can't do it.
    But just about like a stick of rock, in English, wherever you snap the internet, you will find the domain name system. And it is important whether it's in certificates, whether it's DNS policy data, it's important that internationalized domain names work all the way through the stack.
Local-language content is burgeoning. If people don't have content available to them, they will find other means. That is a risk we should all be worrying about.
    >> MODERATOR: Emily, thank you very much for pointing to these particular elements which are, indeed, important, if it's IPV6, or a shift in data, and the multiple languages and the international domain name systems.
I would like now to ask Joey to tell us what he thinks is important to keep the internet open. He is chief privacy strategist at Oracle's organization. Joe?
    >> JOE ALHADEFF: Not to disappoint Andy, I'm going to use the word "ecosystem" in my first sentence. The big laughter is that I've been in the OECD for years and I use "ecosystem" in every speech. It goes along a number of different fronts. So I actually have more buckets than Andy's four buckets and I will say that they generated from a document that was developed the APEC called the "Digital Prosperity Checklist." Infrastructure, investment, information flows, intellectual capital and innovation. What is your technology infrastructure, which I won't address because Bill's coming behind me and I would be amateur hour compared to what Bill will say on the issue.
    Also your regulatory infrastructure including your policy infrastructure. That goes to policy, that goes to education and training. That goes to a number of different issues. Because we can't just think of open internet as, "Gee, the pathways are open." This is an ecosystem that has to be open to make the internet meaningfully open because the internet operates within jurisdictions, practices, and law, it's impacted by technological decisions that are happening along the way.
    Similarly with investment. We talk at the IGF about the need to get a stable investment for the IGF. We talk about IPV4 to IPV6 transition. You talk about start-ups who want open internet. Do they have capital available to them? That is important. If data is the currency of the new economy -- some people say the oil, but whatever. Then the ability to use and manage information is critical whether it's in a big-data application and you may or may not want to -- you will have to figure out how to configure the information. That is part of the ecosystem of what it means. The ability of the people in terms of technology skills, linguistic skills, and that goes down to the name -- what is in local content whether you can get to local content. And finally, integration was the "I" in which internet is. Trade across the border, at the border and behind the border. What is important is the potential for societal benefit, the potential to make life better.
    One of the reasons we want to use big data is to do a lot of improvements, are it is in healthcare, whether it is in city planning. What we hear is data applications with something relating to marketing, which may have an uncomfortable factor. When you think about how data can be important because you find correlations in patient treatment, which is one of the things that OECD is geared to. To give them credit, one of the forums that put these issues on the map, that put the open internet on the map was the OECD Ministerial which took place in Ottawa. It was a transformative event. It laid the ground work for how we thought about internet policy for decades after that.
    So these are important issues which we need to discuss and come to terms with, but we need to understand them. And across those six "I's," but as you affect one, you affect all the others. If you constrain one, you will constrain the others. They are interdependent. It is a matrix of sorts.
So from a business perspective, the open internet is a place where it has to be open for innovation. Andy talked about permissionless innovation which we support, but we add, "That doesn't mean outside the rule of law."
    Clearly the concept of being able to support innovation, a variety of business models, a variety of applications. One of the most interesting examples I've heard of the concept of the open internet, it goes to the potential, was the hole-in-the-wall project in India. Where literally, someone made a hole in the wall. Put a computer in the hole in the wall. People figured out how to use it. There was no manual. This was just curiosity. When the internet is not bounded, that works.
So the open internet is possible because the possibilities right now is boundless. The open internet is the base upon which we build. Thank you.
    >> MODERATOR: Joe, thank you very much for this presentation. I noted the importance of this digital prosperity checklist with the six I's -- not the five I's -- but the six I's the I think the interdependency among these elements that you were right to highlight. I would like to turn now to Bill. Asking him the same question. Bill is the Executive Director of Packet Clearing House which is an international organization for providing security to internet infrastructure including internet exchange points and the core of the domain name systems. So from your perspective Bill, what is your perspective on keeping the internet open?
    >> BILL WOODCOCK: First, I would like to thank Sam, Andy and Anne for their collaboration to bringing quantitative information to form policy making and improving norms and public expectations and so forth as a result of that. We've, I think, really benefited from working together. And we're really happy to have our exchange points highlighted and we're looking forward to working on cyber security best practices in Mexico.
    So turn to the question, I think the thing that interests us most about internet openness is the ability to compete, the ability to be a new market entrant. We look at markets throughout the world and try to figure out what about that market is working, what about that market is not working on the internet.
    The markets that don't work well, that are not growing, that are not keeping up with global rates of growth, are the ones where there's a lack of competition and innovation, a lack of ability for people who are dissatisfied with the status quo to enter the market, innovate, and exceed the previous norm. The markets that do better than global average tend to be the ones with lots and lots of small and medium-size organizations that are all competing to bring new ideas to market, bringing things to market at lower prices that allow a larger base of customers to take advantage of them, to build upon them and to create new industries.
    The internet, fundamentally, is a utility in the same way that roads are a utility. If a business can't do business on the internet in the same way that a business would do business on the roads, you know, putting a product in a truck and sending it to market, that business is not going to be able thrive. If a bakery had to pay a toll every time their delivery truck left the garage, they just wouldn't be able to grow at the rate that they do where -- in a society where the roads are a public utility.
    The internet -- the point there is not to say that governments should be providing internet for free. That really doesn't work well when it's tried. The point is that governments should be ensuring that there's an environment where the public can provide internet service to itself at as low a cost as possible. That's what happens when you allow new-market entry in a really unconstrained way.
If you look at growth in economies, it doesn't come from big-monopoly companies. But basically, they're doing the same then year after year. All the growth comes from little companies, all the new employment comes from new companies. All the innovation comes from new companies. From kids who get out of school who have a bright idea and a lot of energy.
    I think that we teach a lot of workshops to regulators and talking about internet regulation, and one of the big points that we try to make is that the simplest distinction you can make from regulatory point of view, between successful economies and unsuccessful economies.
In the successful economies they use class licenses really sparingly and they avoid individual licenses whenever possible. And in unsuccessful economies, they don't really have class licensing. Everything is an individual license. If you want to innovate, you have to pay up front for the right to do it before you're allowed to try.
    In a class license, you go, you do your thing. As long as you're obeying the rules of the road, you're free to try. So that makes a huge difference.
    And the test that we ask people to apply -- the sort of intellectual exercise to figure out whether what they're doing is go to go work well is we say, "If a kid graduates from high school and decides that they're not satisfied with the service that's provided by -- you know, the largest -- the dominant player in the marketplace, and they want to compete with the dominant player in the marketplace, what road blocks stand in their way? How many of those road blocks are tax based? How many of those road blocks are legislation that special cases things in favor of that incumbant?"
And if they have those kinds of road blocks in place, they are preventing innovation and those are under their control. Those are things that the regulator can deal with and those are impediments that can be removed from the path of progress. That is my take on open internet.
    >> MODERATOR: Thank you very much, Bill, for highlighting the one dimension of openness. We've had quite a varied presentation of issues around the openness of the internet. And now we have 45 minutes for discussion with you, remote participation, if there is any, and among the panelists.
So let me first ask if anyone in the room wants to ask a question, or follow up on what someone said on the panel, or shall I start directly with the speakers?
    >> What did the hole-in-the-wall -- hi. I wanted to the clarification about the hole-in-the-wall innovation, or something that you talked about.
    >> In India?
    >> Yeah, it was someone that did an experiment where there was a wall. They literally carved a hole in the wall. Put a terminal there with a keyboard and saw what people did with it without instruction. It wasn't people who necessarily had an aptitude already at it. By trial and error, people started to do things, use it, and innovate. It was just a question that, left in an unfettered fashion, people will find a way to innovate. One of the best examples is, his daughter knows how to use an iPad better at the age of 3 than I did. You can see what happens when you don't bound innovation. You can see what can happen when people are free to use things in new and innovative ways. When you put conditions on them, the more you constrain innovation. That was the purpose of that story.
    >> MODERATOR: Absolutely.
    >> AUDIENCE MEMBER: Sorry. I just want to follow-up on that example because it happened -- something in Colombia, something that was quite interesting. The Colombian Government has applied to deliver tablets to different regions of Colombia. Some of them are very, very far away from city centers and you need to take four or five hours through a river and basically, you have 2G networks or 3G networks there.
    They delivered some tablets to these kids, and of course, tablets were restricted just to educational material. Four months later, when they arrived, all tablets were packed with games. But what was incredibly interesting is that they never had no one to teach them how to use the internet because teachers didn't have enough -- let's say -- yeah. They didn't even know how to use internet. But these kids, in four months, learned how to hack the system that the Government has put in in order to not allow them to install games.
    So what is very interesting is that the internet allowed them to learn how to hack their own system in order to get what they wanted, which was games. And it was very interesting. It was not an experiment. It just happened. And it just happened out of the deployment of policies.
What we've seen is that it's proof that just put an internet there in the hands of someone who has never had the opportunity to have it. It's enough to learn to -- to give them the learn -- to learn how to hack the system that has a lot of restrictions. So it's a very good example of what has happened, and I thought that was a very close example of -- with the one you just said.
    >> I would just add, that my story did not condone hacking.
    >> MODERATOR: Thank you very much. There was a question up there. The lady in the middle.
    >> AUDIENCE MEMBER: Okay. I would like to comment on the legislative aspect of an open internet.
    >> MODERATOR: May I ask you to be a little bit more precise in your question, when you say "legal aspects on the internet" do you mean laws on the internet?
    >> AUDIENCE MEMBER: Yes.
    >> MODERATOR: Who wants to -- Emily? Thank you.
    >> EMILY TAYLOR: As a recovering lawyer, I guess I can try to attempt to answer that. This is a very broad aspect. I think one of the fundamental things is that offline laws apply to the internet just as they do in every day life. But I think that the -- for example, the reactions to the revelations of mass surveillance last year, I think, really highlighted some gaps and the fact that -- you know, even in the sort of -- across the Atlantic, if you like, that European leaders became very aware very quickly that they were unable to safeguard the fundamental rights of their citizens when it came to processing data outside of their jurisdiction.
    So I don't know if that's where your question was intended to lead, but I think that -- you know, as everybody starts to participate in the internet, in this single network, then national laws -- or regional laws -- become more and more strained at the edges, and the gaps in -- you know, the disparities between different jurisdictions become more and more problematic. The areas this is particularly keenly felt is in individual's fundamental rights, in the area of copyright versus access to information.
    But you know, as the population that are online increase and diversify, more and more of these tensions, I think, will be felt through conflict of laws.
    >> MODERATOR: Thank you, Emily. Okay, Joe, and then Andy.
    >> JOSEPH ALHADEFF: You have to think about the constraining nature of legislation. They will make them obsolete before the ink is dry on the page. Legislation will sometimes not understand how it should apply or take into account certain things.
    One example I'll just use of when people are thinking about legislation -- when Massachusetts came up with a digital signature act, they actually went back and did a search of all previous Massachusetts legislation and found 400 instances where Massachusetts legislation referred to a signature, a handwritten signature or an ink signature and had to make distinctions as to which ones would be subject to the digital signature legislation. Because they decided, for instance, when it came to signing your last will and testament, maybe they like your idea that you would put your initial on every page and sign your name at the bottom, so that Grandma wouldn't be taken by her grandson by saying, "Just push this button, Grandma, and we're done." It is not a question of the absence of regulation, but regulation written at a level where it request be applied over time, not where it attempts to micromanage. So look at the what, not the how.
    >> MODERATOR: Thank you for that. Andy has accepted to keep his turn to give you the floor. So the lady in the middle. I will take remote participation, and I go back to the gentleman.
    >> AUDIENCE MEMBER: Hi. I work for the British Government and the economics of the open internet is one of our favorite things to talk about, that we have very little hard data on it. So if anyone up there has any good, hard data, please get in touch with me. I would be interested to know how you might rationalize China's definition and their dominance -- I shouldn't say this, but their antithesis of the open internet. Is it purely their size that let's them get away with it, or what else can it be?
    >> MODERATOR: Thank you for this question, Bill and Andy. Andy first, Bill send.
    >> ANDREW WYCKOFF: In terms of data, we are trying to amass whatever we can, but it will take some creative uses. That said, some of my colleagues in particular, say I'm working with Bill, and others have done work on issues of IV4 and IV6. Related to China, I think it's too early to tell, okay?
I think, first of all, the growth wasn't what it was five years ago. They, too, are having a slacking. They're facing huge internal challenges. And it's my thought so far from what I've seen, I welcome people correcting me, that a lot of their efforts in this area have been replicating applications and approaches that have been borrowed from other applications around the world.
I'm looking for indigenous killer apps coming out of China. If you know them, please correct me, but I haven't seen them. By cutting yourself off, I think you limit that knowledge flow, you even limit your ability to replicate other things going on in the world, at least in fast-enough time to get off the chair. So I'm cautious that I wouldn't judge things too quickly.
    >> MODERATOR: Thank you. Bill?
    >> BILL WOODCOCK: So I just sort of jotted down four different things that I think contribute to China's -- what economic dominance China has in the area of the internet. I'm not going to argue about whether it is significant, or how it compares to other things. They have four things that occur to me. First of all, they have Hong Kong outside of the firewall. Hong Kong is essentially a giant, free-trade zone that is not subject to the same kinds of controls that Chinese domestic internet is inside the firewall.
    Second point is, inside the firewall, they engage in really aggressive import substitution in the same way that say Brazil does in the automotive and aviation industries and many other countries have done at various points early in their industrial development.
    So you don't see a vast amount of inbound bandwidth through China across that firewall. By making it a little bit difficult by adding a little bit of friction at the border in the same way that you would add a tax on an imported piece of equipment, they encourage people inside the border to consume domestically produced service rather than internationally produced service.
    Third is service. Most of the people inside the firewall speak Chinese. Most people outside the firewall do not speak Chinese. Therefore, the content in the Chinese language tends to reinforce this perimeter around clean a. So they tend to not import so much content from the outside because most of the content on the outside is not in the language people on the inside speak. This is different, for instance, for the 10% of the world that speak English. Think of New Zealand. Most of the content that people in New Zealand are consuming in their own language is produced outside their country. Not only outside their country, but across a huge ocean. At least one of them -- from them, right?
    The fourth one is something that China and India are producing aggressively, for different reasons but with the same over-all form and outcome, and that is building international fiber. So China and India are the two dominant players in the undersea fiber laying globally.
    For China, a lot of this has to do with soft power projection. For India, it's much more to do with pure economic benefit, right?
    That gives them two benefits. First of all, obviously there's the revenue associated with hauling other people's traffic back and forth between continents and the ability to retain the profits from hauling traffic in and out of China and across those oceans rather than giving up those profits to an owner of fiber elsewhere.
    The other benefit, though, the soft-power benefit is the ability to help their allies, right? This is something we saw in the Russian attack on Georgia. The only country that was able to assist Georgia. So Telecom was able -- they were able to stay online because of Telecom's work. China, having their control into many, many countries allows China, as a matter of policy, to aid their allies, if they wish to, in the sphere of internet capacity.
    NATO has no such capacity. The US Government has no such capacity. The British Government doesn't have that much capacity. Would he don't have the public sector interests that China does. And we -- you know, part of being western countries is our values say that the Government isn't there to compete with the private sector and the Government -- the private sector isn't just there to serve Governmental interests. So it's not clear that -- there's no reason to say that we want to go in that direction. But there is a strength that they have in that focus, and that coherence, that we don't have a complementary response to.
    >> MODERATOR: Thank you very much, Bill. Emily, you want to add something.
    >> EMILY TAYLOR: Just a very quick response to your question. On the -- on the language protocols, actually, there's not such a closed story coming from China. There's a history of cross-border collaboration in doing the very intricate and difficult work in the CJK community between Chinese, Japanese, Korean and other countries in the region -- countries -- you know. So, too, there might well be a closed sort of situation at the -- at the application level. But the engineers are busy collaborating away across borders and doing some really wonderful stuff in collaboration with others that brings -- that advantages the protocols and has done for the last decade or so.
Another issue is, I think, it is interesting to reflect on where ideology confronted evidence that contradicts it. If you say, "Government, keep out of the internet."
    I was part of a study of the UK's adoption of IP Version 6. The UK is behind the ball on that. When you look across the world, where IPV6 is doing well, the Government has a hand in it. Now, that is a very uncomfortable finding that the evidence produces. And I think as researchers, we have to be able to swallow that and to accept it when the data throws up uncomfortable anomalies that challenge our ideology and to be able to make policy decisions accordingly.
    >> MODERATOR: Interesting point. I would like -- before I go to three gentleman, I think, in the room, I would like to take the remote question. Thank you.
    >> REMOTE MODERATOR: A question from Bill. What is the strongest argument for countries to keep their networks open?
    >> MODERATOR: Excellent question from Bill. You might ask Bill, if you want.
    >> BILL WOODCOCK: Sure. I'll give it a shot. What is the strongest argument for developing countries to keep their networks open? There is this three-way divide I've discovered. I'm going to paint a picture here. I'm going to say that there is one camp that is the OECD countries and I'm going to characterize them countries as not just the members of the OECD, but the countries whose governments recognize that the internet is fundamental to their economic success, as a country, as a society, whatever.
    That if you get rid of the internet, their economies will be severely degraded. That is one camp. In the other camp -- and I'm characterize this as the China-Saudi Arabia camp -- they're concerned with their ability to control public speech and public thought and the Government's ability to exercise that control. In this camp, the economic benefits of the internet, yeah, nice. But the social dangers of the internet are far more strongly considered.
    And the third camp, which is the largest camp, are the countries that are not yet deriving vast economic benefits from the internet and don't have a means of controlling public thought or public speech yet. And so these are sort of on-the-fence countries. The developing countries are by and large in that third camp.
    So we have the fight for internet governance, whether the internet is going to go in the open direction, or whether it is going to go in a fragmented direction. And on the sort of OECD camp side, the argument is that, if you side with us, your economy will benefit, and your people will prosper and they will enter the middle class and their children will receive better educations and they will have clean water to drink and so on and so forth, right? This is a clear and demonstrated path to economic progress, industrial development and prosperity. The
    The problem is that the Chinas and Saudi Arabias in the world say you can have both. You can have control over public speech, and "You can emulate us and be okay." To some degree, they have arguments to back that up. OECD countries -- some would happily trade that for a society where public speech is controlled and the freedom to innovate economically is less open.
    So I think communicating that to developing countries that are kind of on the fence and looking at these two paths and helping them understand, that yes, on the face of it, you can see that -- you know, China and Saudi Arabia don't do too badly. But if you ask them which way they would rather live, they would say they would rather live in an open society that values freedom to innovate and freedom to speak.
    >> MODERATOR: Thank you very much. I would like to take advantage with the presence of Pablo to ask him if he can respond for Latin America, where there are a number of countries that maybe are not in the OECD camp, but one of the other ones.
    >> PABLO MARQUEZ: If I understand the question is, what is the most important reason you can give someone to have the open internet for developing countries. And I think it's based on a general principle. The general principle is that the open internet, at some point, guarantees the general principle that we are required to give people equal opportunity for all.
    What we've seen in Colombia and in the experience of different other Latin-American countries is that the internet gives, at some point -- and having certain differences, but at the end, allows children in a very small town of Colombia to have the same opportunity to access to information as someone in Bogota, or someone in London.  So open internet, open in a full way, guarantees the protection of human rights, including the access of freedom of expression. That is the most important reasons why an open internet should be kept in developing countries. It has very important outcomes regarding economic advantages that it gives to anyone who has access to internet. It is a tool to protect human rights.
    >> MODERATOR: Very good. May I go back now to the room? Okay. This lady is -- if you can wait a little bit. But behind. Yeah.
    >> AUDIENCE MEMBER: Thank you. Hal here with the World Wide Web Foundation. We actually, on an annual basis produce a web index that try to capture the openness of the internet environment. I very much join your colleague here. I don't want to use the word "ecosystem" not just to make you laugh at me, but I very much imagine these -- so the web index is composed of four sub-indices that try to capture universal access, freedom of openness, relevant content and some of the economic and social empowerment.
    And when I basically discuss with the ranking and the benchmarking of countries as they come and tell us why we're ranking low in this and this, for me, there is interrelationships between all those sub-indices and all those indicators. So it's very much an interrelation for your six I's. We will not rank high on this index if you just focus on universal access. You need to also enable an environment free of surveillance and censorship and privacy rights.
    You also need to offer your citizens relevant content and freedom of information. So I very much join in your thoughts around these interrelationships.
    >> MODERATOR: Thank you very much for your comment. This lady here?
    >> AUDIENCE MEMBER: Thank you. I'm from Turkey. I would like to ask a question to the gentleman from Colombia. You mentioned that you resolved all the linguistic barriers of the country. Now if -- when you translate the language, if the concept is not there -- for example, the word "information" is not exist in another culture. How you resolve this issue? Thank you.
    >> Well, these applications that were delivered by the Government have to -- let's say two goals. The first goal is not to just translate. It's basically to produce content in your own language. That is the main goal. But it has a second goal that is to allow and facilitate access to the information that is on the internet. And there's where translation works.
    But basically, the main goal is to have the tools in order to teach people how to produce content in their own language so they keep producing content, but also have the opportunity to access. Of course, there will always be problems with translation, and we have it all the time with the commonly developed languages, imagine with the indigenous languages that don't have the level of development that other languages have.
    But what they are basically doing is making tools to preserve the language. Having regard that there are other languages that prevail on the internet. So what the tool -- it basically has its goal and its more specific goal is to allow them to produce information -- my goal is to allow them to have access to more information.
    >> MODERATOR: Thank you, Pablo. Mike?
    >> AUDIENCE MEMBER MIKE NELSON: Mike Nelson with Georgetown University.  I hope this webcast goes viral. I hope that some of you in the panel now will come to another panel tomorrow. We have a new economics for the internet. Our UK participant asked, "Where is the new data" I hope this will go viral, so you can challenge the data. My question for each of you, if you have a theory or a forecast that would help us better understand the internet and its evolution, what would that one thing be?
    >> MODERATOR: Thank you.
    >> AUDIENCE MEMBER: I'm hoping a million people will watch this, including economists and they will go work on your question.
    >> MODERATOR: Mike, you stole my question. That's great. That's great. And each member of the panel will have the opportunity to respond. Shall I start with Bill at the other end?
    >> BILL WOODCOCK: Sure. So I think this question of data and analysis is really central to both the value that the OECD provides to the world and also how -- you know, I first came to work with the OECD.
    We maintain the global directory of internet exchange points which forms a time series data set over more than 20 years now we've tracked exchange points as they're created, how much bandwidth is produced by each one, and exchange points are the factories that produce the world's internet bandwidth.
    So having that directory, having more than 20 years of time series data allows us to see how the internet is growing, which are net importers and which are net exporters. Which countries are consuming their own bandwidth or from other markets. There are a vast number of analyses that can be done around that. Fundamentally, it's all about getting the best possible product to the most people at the lowest possible price so they can use it as a tool to develop the rest of the economy.
    I think there are these sort of very straight-forward, quantitative -- knowing what bandwidth costs, that is something that telegeography has tracked. The price of internet bandwidth, but that data set is a very sparse one and it is not very deep time series wise. As Mike points out, it is very expensive to get access to. So you know, we've been looking at the possibility of trying to produce an open source alternative to that that would be richer in terms of density of data points, and potentially over the long term could provide a good long time series data set of price of internet access.
    There are also some more esoteric measures that we find really valuable. One of the most interesting indices that we maintain from our own point of view. Some people don't get it, because it is a little esoteric, as I said, is the number of cross-border ASN -- it is an internet network like France Telecom or Telstra. Each of these is a big internet network of which the internet is composed, operated by a different company.
    Each of these is uniquely identified. So when two of these networks interconnect, we can see this in the network topology. We can see that there's an adjacency between those two networks.  You can calculate how many networks within that country are directly connected to networks outside that country.
    So for a country like Algeria, you might have exactly one cross-border connection. For the United States which -- for its many failings, particularly in the broadband deployment area, still leads in this one metric. The US has about 60,000 cross-border adjacencies. Many countries do very well in that metric as well.
    An interesting thing is how closely that metric correlated around metrics of freedom of the press. The more open they are, the more likely they are to allow freedom of publication.
    >> MODERATOR: Please finish.
    >> BILL WOODCOCK. So that is an analysis that requires a bunch of sort of previous calculations and so forth. There are also a lot of things that, if you had good geolocation, we work on things that allow you to do geographic analysis of internet data set so that you can correlate data from the internet topology with data about -- from sort of national demographics. So that's another area that I think is a rich, unmined vein.
    >> MODERATOR: Thanks very much. Really interesting. Joe?
    >> JOSEPH ALHADEFF: Thanks. My answer is less complex. I'd like us to better measure the ripple effects of innovation. There is -- the direct effects are somewhat measureable. Difficult because, you know, while I synthesize with economies who try to figure out how to -- figure out how to tax innovation. Innovation doesn't occur in a linear fashion or in one place. If five people are on a conference call, I'm not sure how I allocate the call. In terms of the ripple effects, specifically in ITC Investment. That is not even then talking about the innovation itself of the then you have the fact that things are used in ways that are never foreseen. I mean, the Post-It note that we love today was an attempt to develop an adhesive that was a failure. It was a product that probably developed more money than 3M ever made. It's not "I failed at my project." It's "I figured out something, 6 people built something from it, and 12 people built on top of that. That is a chain of investment." A lot of that may never get captured. I guess to conclude with the word I opened with: It's all about measuring the ecosystem now.
    >> MODERATOR: Thank you, Joe. Emily?
    >> EMILY TAYLOR: I'd like some economic analysis that would enable us to answer Bill from Texas's question in a second. You know, what is the strongest argument in favor of keeping networks open. There must be data out there. Let's measure it.
    >> PABLO MARQUEZ: I will be brief. You don't see national accounts the international economy properly represented. That makes the analysis of the impact in a general model of the internet economy in the United States. So I think that's the question that I will ask economists, how to include international accounts in the internet economy.
    >> MODERATOR: Good point. Andy?
    >> ANDREW WYCKOFF: I hate this question because I could spend a week on it. And I hate going last because my friends up here have stolen a lot of my ideas. So I'll kind of pivot off Pablo a little bit. I think economic analysis in the statistics to underpin it, don't well-understand the pivot that's occurring from fixed to mobile. How businesses are organized, how our lifestyles change, how we even -- if you look at statistically -- and I don't want to put everyone to sleep at 4:00, but we use the same price index. We consider mobile services over mobile to be quality-wise, the same as over-fixed. And that's a joke because obviously there's much greater functionality and you can see the market move towards that functionality. And we're not capturing that.
    >> MODERATOR: Thanks. Thank you. Thank you very much. I'm afraid we have 3 minutes before the end. I see a last question and then I conclude. If you can be very quick. Thank you.
    >> AUDIENCE MEMBER: I'll try to be very short. I'm from Russia. For the three years we are making research on the Russian internet economy, and we've seen that -- well, it's not surprisingly, but we've seen that probably the most important policy that can Government implement (sic) is to provide cheap access both to the internet and both to some sort of devices. But not -- it's not -- it's seen only after about three or four years, not just right at the start. And the thing that we probably need to talk more about prolonged effects of providing access and educating users on what they actually can do with the internet and to promote economy.
    >> MODERATOR: Well. Thank you. I'm sorry. We are really out of time. And apologies to the gentleman at the end and to the lady here. We don't have time to take that question. But you can talk to the panelists afterwards. I want to thank all of you on the panel and in the room for a good interactive session. I hope that this discussion will at least interest policy makers and the general public about -- you know, why it is important to talk about an open internet, to preserve an open internet. Thank you very much. Have a good end of the day. Bye-bye.

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This is the output of the real-time captioning taken during the IGF 2014 Istanbul, Turkey, meetings.  Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.
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